NBA panel holds first meeting on bid to oust Clippers owner

Source: Reuters - Thu, 1 May 2014 22:33 GMT

Author: Reuters

By Larry Fine

NEW YORK, May 1 (Reuters) - The NBA on Thursday launched its bid to oust Donald Sterling as owner of the Los Angeles Clippers over racist comments as a committee of 10 fellow team owners or their proxies convened by telephone for a strategy session.

The conference call by members of the advisory finance committee of the National Basketball Association's Board of Governors came two days after NBA Commissioner Adam Silver declared Sterling banned for life from pro basketball.

Silver on Tuesday also fined Sterling $2.5 million, the league maximum, and called on the 29 other club owners who make up the governing board to exercise their authority to force Sterling to sell the Clippers.

The unprecedented move would require a three-fourths majority vote under the league's constitution and bylaws. If approved, the board could then go further still and vote to seize ownership of the team for the NBA itself to sell, cutting Sterling out of the negotiations.

Silver and at least two of the owners, including the interim chairman of the board, Glen Taylor of the Minnesota Timberwolves, have expressed confidence they could muster the votes necessary to force a sale.

But some experts suggest that a number of Sterling's fellow owners might be hesitant to support action they felt could set a precedent that would weaken their own future property rights.

Sterling, who bought the Clippers in 1981 for $13 million when the team was based in San Diego, has not indicated whether he would relinquish ownership without putting up a fight.

Experts have estimated that the franchise, which moved to Los Angeles in 1984, could now be worth as much as $1 billion, posing an enormous potential capital gains tax liability on Sterling if he were to sell the team.

A number of legal scholars and sports business analysts have said they expect Sterling and the NBA to be on a collision course that will be fought out in court.

"The guy has a reputation for being highly litigious. I just can't possibly imagine him rolling over and handing the team over and not fighting back," said Adam Schlatner, a sports business attorney and commercial litigator.

Schlatner, who handles legal matters for the National Hockey League's New York Islanders' owner Charles Wang and has had dealings with clients involving the NBA, said the league might consider allowing Sterling to sell the team himself by a prescribed deadline.

But he predicted that, one way or another, Sterling would end up severed from the Clippers and would realize that "the franchise would not be economically viable if he continues to own it."

The scandal sparked outrage from fans and players, and numerous commercial sponsors pulled their support from the team before and after the NBA moved to expel Sterling.

Sterling was banned from any further ties with his team or professional basketball, and stripped of his seat on the NBA governing board, days after two websites released audio recordings in which a voice said to be Sterling's is heard criticizing a female friend for "associating with black people."

Silver said Tuesday that Sterling has acknowledged to the NBA that the recording was authentic but did not apologize.

The sale of the Clippers could take weeks. According to NBA bylaws, Silver must present Sterling a written copy of any allegations justifying a forced sale within three days, and Sterling would have five days to answer.

A special hearing of the Board of Governors, consisting of all the owners, would then be held on a date no more than 10 days after Sterling's reply.

The prospect of Sterling's ouster led several luminaries of sports and show business to signal interest in buying the team. Among them were talk show host turned media mogul Oprah Winfrey, Hollywood executive David Geffen, computer technology titan Larry Ellison, former Los Angeles Lakers star Earvin "Magic" Johnson and boxing promoter Oscar De La Hoya. (Writing and additional reporting by Steve Gorman in Los Angeles; editing by Gunna Dickson)

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